Good old days of interest rate arbitrage...

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Good old days of interest rate arbitrage...

Postby jeffysdad » Sun May 03, 2009 7:42 am

Back in the day (2006-2007) I had a B of A Mastercard with a $55,000 limit. Before they spent all that money to acquire office furniture and Merrill Lynch they were apparently feeling flush enough to offer me a cash advance up to my credit limit at 0% for 9 months (maybe 12, I forget) for a mere $75 (the capped balance transfer/cash advance fee at the time).

I took that money and put it in an ING Direct savings account, which at the time -- back in the day -- was paying an interest rate at least worth mentioning, although I forget now exactly what.

When it was all done I made around $1,200 for doing almost nothing. It sure felt good to make some money off the banks after years of paying interest (I'm now debt-free and pay off my Chase Freedom every month).

Does anyone else have stories about interest rate arbitrage or other ways that you've made money from credit cards (besides the obvious points/cashback)? :)
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

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Postby Mogul of Pineapples » Wed May 06, 2009 3:32 am

You know nowadays it seems like all those opportunities are gone. There was a whole art of how to do credit card arbitrage with the interest rates and make money and some were making thousands like you said. This was especially lucrative when CDs were paying 5 to 7% and you could do a 0% balance transfer offer on a high limit credit card for 12 months. On 50k or 100k you would be pocketing several thousand dollars. At least as of now there's not much opportunity out there to do things like this. Even the points and best cashback credit cards have scaled back their programs. It's too bad because all of us with good credit are being punished for all these delinquents.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

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Postby Cucumber » Tue May 19, 2009 2:35 pm

Office furniture.... LOL!! :ppp Wasn't it Merrill Lynch too that the CEO spent $300k re-doing his private bathroom at his office?
Stop talking crap about him!


Postby creditorfinds » Fri May 22, 2009 2:26 am

Ye, I got declined times. Confused...

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